Is Gold A Good Investment?

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Gold is one of the largest financial assets in the world with an average daily trading volume of $183 billion, and its value has seen explosive growth in recent years.

At the start of 2000, gold was priced at just $460 per ounce when adjusted for inflation. By August 2021, that number had ballooned to roughly $1,815 per ounce.

But not all investors are in love with gold. Warren Buffett has spoken out numerous times on his doubts, calling it an asset with “no utility.”

“It doesn’t produce anything and that’s why from a long-term perspective, it’s a hard asset to invest in,” Odyssey Capital Advisors chief investment officer Jason Snipe said. “It’s prudent portfolio management to have maybe a small allocation there but this is not an asset that you want to be heavily entrenched into if you’re looking for long-term yield.”

Since 2011, the S&P 500 has returned more than 16% on an annualized basis. The annualized return for the 10-year Treasury note sat at just over 2% in that time period. Gold, meanwhile, has fallen slightly over the past 10 years.

“Early on, you see strong performance, strong return or yield from commodities such as gold. Generally, as we move into a different cycle, gold is not as great a performer as we move into a normalized environment,” Snipe said.

Whether gold is an effective hedge against market volatility is also widely debated among experts.

“Gold is not necessarily a perfect hedge against inflation but it can be a strategic hedge against inflation,” according to Suki Cooper, executive director of precious metals research at Standard Chartered Bank.

“Various studies have shown us that if gold is held for 12 to 18 months before inflation takes higher and then it’s held for an additional 12 to 18 months while inflation moves higher, it can be a good inflation hedge,” Cooper said. “But if it’s just bought for a short period, let’s say a month, it may not prove to be an effective inflation hedge.”

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Is Gold A Good Investment?

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34 COMMENTS

  1. I have been a dividend focused investor for a long time. This does not mean I don't own growth stocks, I do. A well rounded portfolio should be a mixture of both categories. One way to minimize the anxiety out of stock market investing, is to make sure you keep a large cash cushion. I invest in the market, but never put all my money in market.

  4. Warren Buffett may or may not have been a rebellious child, but I always thought it more than coincidental that his father, a friend of the inventor of modern libertarianism, Murray Rothbard, was a long-time advocate of the gold standard. Might that have something to do with WB's strange dislike of gold? Berkshire currently holds $157 billion in cash, which has inferior returns to gold. This is one of Buffett's glaring weak points. He chooses fast-depreciating cash with returns less than half of gold's appreciation, over gold.

  6. Imagine taking investment tips from a media channel owned by CNBC, which is owned and controlled mostly by the mega-funds.

    They only have your interests at heart guys and are just investing money and time in making this content to help you reduce their winnings in the market.

  8. So… If you're an investor, probably gold is not a good asset… But most of us have full time jobs… So we value our spare time… It gets to the point where we compare stacking cash to stacking gold… And imo gold wins here… At least I've stacked cash long enough to tell it's not a way to go…

  9. Buffet sold paper gold not physical gold. These clowns are talking about gold stocks. physical golad and silver is where you want to be when the system changes. Bitcoin! Ethereum as well yo.

  10. Warren Buffett in the late 1990"s held about a $1,000,000,000.00 worth of silver. I believe he sold it because JPM made some deal with him. Anyone who really thinks Buffett doe not own gold is fooling themselves. Central banks have been buying gold non stop and accelerating over the recent few years. The COMEX is being drained of physical gold and silver. Wake up folks watch where the real money is moving. Bufett, Bezos, Gates, Zuckerberg are selling huge amounts of stock as the market moves up. ding din ding….hellllloooooo!!!!

  11. Of course Buffet does not invest in gold. Gold is not an invest mean. Money/cash is not an investment. For a 20 year old who needs to build assets gold may be a bad idea but for a 60 year old who needs to preserve assets gold is a good idea.

  12. I never viewed metals as an investment, but I always saw it as a great way to save your cash & retain the value from when you bought it. It’s not hard to turn it to liquid cash, and it beats letting inflation destroy your savings.

  13. It’s always a good option to keep some gold. Well with the current market situation and everything at stake with the present economy, I’d say you’re better off staying away from stocks fr awhile or better still reach out to an adviser for guidance.

  15. Gold is NOT an investment. Its a hedge. Its a speculation. But not an investment. That's not a criticism. Its potentially a better store of value than cash. (Cash is also not an investment. )

  18. I used to trade gold futures and options on the COMEX in NY…I was a full NY Cotton Ex member on the same trading floor. People forget that gold hit a peak about $840 around 1980…then collapsed to the $200's and then took well over 20 YEARS to recover to over $800 again. Repeat : 20 YEARS! (look up a long term gold chart!)
    For most people GLD and SLV are the best ways to get precious metal exposure. Nothing to hold or look at ….BUT…..easy to buy …easy to sell…very frictionless…..almost nothing in fees.
    That all being said……why precious metals? There are so many more precise ways these days to hedge inflation…or hedge interest rate movements…so many different products that compete with precious metals as an investment asset. Precious metals are no longer what they used to be as an investment class even just a generation ago. I gave them up many, many years ago.
    Even Peter Schiff is getting a bit shaky on his gold vs bitcoin argument these days.

  21. If you wanna be successful, you most take responsibility for your emotions, not place the blame on others. In addition to make you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life.

  22. Gold has always been natural money, but on the other hand, I'm skeptical if it's necessary to stack up gold now based on fear that a recession will occur soon, because I think it's unlikely, and the stock market still has a runway. I'll divide 60-40 nonetheless and put 60% in stocks. Not sure which stocks yet though.

  23. Since Nixon's time when he took America off the Gold standard, the American dollar has more or less become a fiat currency. Take your dollars out of the bank and buy gold and silver. Remember the dollar is not supported and could become worthless. I am British and what happens in the U.S.A usually effects us here in the U.K. Don't delay buy gold.

  24. The main asset GOLD and SILVER are worth investing in. Just buy what you can afford and then forget about it for a couple of years. GOLD is a good investment because of it scarcity. It is a real thing that you can hold in your hand…not like fiat and proxy money. The World is moving into dangerous times and that gives good reasons to invest in Gold or Silver.

  30. Filthy rich individuals such as politicians, Hollywood elites. Trying to push Gold and Silver is just ONE reason why I don’t want it, or need it.
    I do realize the dollar has almost no value.
    But buying gold is no insurance policy.

    The individual who can maybe afford and buys $100.000 (chump change to millionaires) are no better off than those who don’t own any gold.

    The millionaire will give you PENNIES on the dollar if the day ever comes you need to sell it to survive.
    It’s going to work like a pawn shop, an example a person trying to sell a $5.000 ring at a pawn shop. Might IF they are lucky get $1.000. I would bet it’s more like a $500 offer.

    It’s a scam.
    If a serious money crisis ever does hit America, the wealthy will get wealthier!

    Look at it this way.
    You think these wealthy people In these commercials pushing gold, are looking out for your best interest. Seriously?

  31. My company deals on real estate, gold investment etc, ww also have digital investment plans where people can invest and get their profits daily and weekly. We also offers loan to our investors.

  32. My company deals on real estate, gold investment etc, ww also have digital investment plans where people can invest and get their profits daily and weekly. We also offers loan to our investors.

  33. Holding physical gold pays no dividends. True. I am wondering why ALL major financial institutions and many countries are investing heavily in gold. Fiat currency is garbage. Not saying sell everything you have and put it into gold, but diversify and add some precious metals into your portfolio. As far as warren buffet, he's not the end all person I go to for financial advice. He's done well for himself by sacrificing companies he's purchased and plundered.

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